Overlapping State and Commonwealth approval requirements leading to project risks

The environmental approval process under the Commonwealth’s Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) operates in parallel to State-based approval processes, such as the development consent process under the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act).

That means that, for example, a person who wants to:

  • construct a road or a pipeline in the vicinity of a nationally listed threatened species
  • develop a building or an industrial plant next to Commonwealth land
  • develop a coal mine that may have a significant impact on water resources
  • subdivide land in the vicinity of Ramsar wetlands,

may need to obtain both a State and Commonwealth approval, if the proposed action is likely to have a significant impact on a matter of national environmental significance.

An approval is needed under the EPBC Act where a proposed action is likely to have a significant impact on a matter of national environmental significance. Matters of national environmental significance include: Ramsar wetlands of international importance, nationally threatened species and ecological communities, migratory species protected under international agreements, the Great Barrier Reef Marine Park, national heritage places, world heritage properties, nuclear actions and water resources impacted by coal seam gas or large coal mining development.  EPBC Act approval is also required where a proposed action is likely to have a significant impact on Commonwealth land and/or a Commonwealth marine area.

Risks arising from duplication

If a proposed development triggers an approval requirement under the EPBC Act, the need for both State and Commonwealth approvals can present additional project risks, including:

  • Delay: parallel approval processes can lead to project delays. For example, delays in compiling and completing applications for separate authorities and satisfying different public consultation requirements. Delays can also arise from potential legal challenges to an approval that is granted.
  • Refusal: the risk of approval being refused is inevitably greater where approval is required in two separate jurisdictions under separate processes.
  • Legal Challenge: multiple approvals processes increases the potential exposure of a project to legal challenge.
  • Conditions of Approval: there is a risk that conditions imposed by the State or Commonwealth may lead to changes in design elements or require additional mitigation measures. Conditions imposed by the State and Commonwealth may also be inconsistent, and increase project costs.

Cutting green tape

The Commonwealth Government’s policy is to reduce those project risks by delivering a ‘one-stop shop’ for environmental approvals, while improving environmental outcomes.

The One-Stop Shop policy is intended to be implemented through assessment and approval bilateral agreements under the EPBC Act with each State and Territory:

  • An assessment bilateral agreement enables the environmental assessment under the EPBC Act to be ‘switched off’ so that the assessment occurs by the State or an agency of the State. The Commonwealth Minister is then able to rely upon the State or Territory assessment report when considering whether or not to grant approval.
  • An approval bilateral agreement enables the actual requirement for an approval under the EPBC Act to be ‘switched off’ if approval is granted under a bilaterally accredited State or Territory authorisation process.

Assessment bilateral agreements are in force in each State and Territory. Although draft approval bilateral agreements have been publically exhibited in each State and Territory (other than Victoria and the Northern Territory), none of the approval bilateral agreements have been finalised due to political opposition in the Senate.

Below illustrates the status of the assessment and approval bilateral agreements that have been implemented in each State and Territory under the ‘One-Stop Shop’ policy.

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Processes covered under the NSW assessment bilateral agreement

The updated NSW assessment bilateral agreement came into force on 26 February 2015. Broadly speaking, that agreement covers the following processes under the EP&A Act:

  • State significant development
  • State significant infrastructure
  • modification of a transitional Part 3A project
  • development consent under Part 4 (but not complying development)
  • assessment under Part 5 (whether or not an environmental impact statement is required).

However, the NSW assessment bilateral agreement will not apply where the consent authority is a local council or a joint regional planning panel exercising the functions of a local council.

A person proposing to carry out a project in NSW that is likely to have a significant impact on a matter of national environmental significance, should consider:

  • if the relevant NSW assessment process is accredited under the NSW assessment bilateral agreement between the NSW and Commonwealth Governments
  • if so, any additional assessment requirements (to the EP&A Act process) that need to be complied with in order for the project to fall within the ‘class of actions’ that is accredited by the bilateral agreement (see Schedule 1 to the agreement).

Where to from here?

If the NSW assessment bilateral agreement applies to a project, a number of the Commonwealth / NSW duplication risks will be mitigated or reduced:

  • Delay: separate applications will still be needed, but only the NSW assessment requirements (including public consultation requirements) will need to be satisfied
  • Refusal: the risk of approval being refused in one jurisdiction and granted in another is reduced because the decisions made by the Commonwealth and State will be based on the same assessment report (even though the report will be considered in the separate contexts of the EP&A Act and the EPBC Act)
  • Legal Challenge: the risk of legal challenge will still be greater than if there were only a single process, but will be less than if separate assessment is carried out at under the EPBC Act and EP&A Act
  • Conditions of Approval: there will still remain a risk of unnecessary or inconsistent conditions imposed by the decision-makers in the Commonwealth and NSW jurisdiction but that risk will be reduced if both decision-makers are presented with the same assessment report and the same recommended conditions of approval.

However, while the assessment bilateral agreement goes some way in addressing the project risks that arise from a parallel State and Commonwealth environmental approvals regime, the risk of increased project cost and delay will persist until the approvals bilateral agreements are finalised.

Stay tuned for PART 2 next week, where we’ll dive deeper into streamlining Commonwealth and State Environmental Approvals, look at the detail behind limitations in assessment and explore the Draft Conditions Policy.